When is the UK construction PMI and how could it affect GBP/USD?
|The UK construction PMI overview
The UK construction PMI for December is due for release today at 0930GMT, with the figure expected to drop to 52.5, when compared to November’s 53.1 points.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 45 pips in deviations up to 2 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.
How could affect GBP/USD?
Technically, the pair remains on track to conquer the 1.3657 Sept high, with the upside to accelerate on a positive surprise, opening doors for towards 1.3700 (natural resistance), above which next target lies at 1.3718 (daily classic R3). Should the data show a bigger-than-expected drop, the spot could reverse towards 1.3567 (daily pivot), below which a test of 1.3532 (5-DMA) becomes imminent.
A bigger-than-expected drop in the construction PMI data cannot be ruled out, given yesterday’s deceleration in the manufacturing sector activity. The construction PMI has widely shown the similar behaviour as the manufacturing and services PMIs, analysts Societe Generale pointed out in a research note.
However, the economic releases could play a second fiddle to the US ISM manufacturing PMI and the latest FOMC minutes, which could indicate the Fed’s outlook on the interest rates this year.
Key notes
UK construction PMI likely to fall to 52.5 - TDS
GBP/USD eyes Sept 2017 highs ahead of UK construction PMI
About the UK construction PMI
The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does A result that values above 50 signals appreciates (or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).
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